FOR YEARS, bankers have been investing a considerable chunk of their technology dollars in computer systems that help process information and transactions. The faster a computer can process checks or loan payments, for example, the better. But the disparate systems that have emerged from this process make data manipulation and decision support complicated and error prone.
In today's competitive marketplace, however, a simple mistake in calculating customer or product profitability can have dire consequences.
"The disparity can quite often lead to poor decision-making or a freezing of the decision-making process," noted Jim Luisi, a Fiserv Inc. vice president based in Pittsburgh.
That's why some banks are looking to new systems and technologies that can help them better access and manipulate data from diverse computer applications.
Chicago's Cole Taylor Bank is one such institution.
"We were having trouble just pulling all the information together" for tasks like report generation, explained Beth Benson, vice president at the $1.6 billion-asset bank.
"Users had to know how to use all different systems."
"Bankers are just like anybody else; they're drowning in data and dying for information," said Jane Griffin, president and chief executive officer of Systems Techniques Inc., a consulting firm headquartered in Atlanta.
"Most banks are trying to achieve better integration between data bases and better ways to extract data," added Greg Schmergel, vice president of the Tower Group, a Wellesley, Mass.-based consulting company. But most aren't doing a very good job, he conceded.
The life raft that Cole Taylor Bank has grabbed to keep it from drowning in a sea of data is a relational data base system developed by Fiserv, a service bureau and software development company based in Brookfield, Wis.
Called Informent, the system aims to allow Cole Taylor Bank to integrate all of the data maintained on various computer systems - mainframes and personal computers alike - into a single information warehouse that can be accessed using Windows-based PCs networked together throughout the bank.
Already, Ms. Benson said, Cole Taylor is breathing easier, even though not all of its systems are yet linked to Informent.
One person has been cut from the reporting side of the bank, and Ms. Benson said she expects to cut at least another two positions from the staff that handles credit, financial management, and operational reporting. Currently, she noted, Cole Taylor has 4.5 staff positions dedicated to report preparation and generation.
Some of the most notable savings to Cole Taylor from the relational data base are apparent in the preparation of call reports, the quarterly reports of income and condition banks file with regulators.
Prior to Informent, staffers at the eight affiliate banks that make up the Cole Taylor Financial Group were dedicating up to 16 days a quarter retrieving data from the banks' various applications and crunching the numbers for use in Call Reports, Ms. Benson said.
With the system that is now being put in place, Ms. Benson said, she can set up reports that will allow for the daily downloading of information from various applications; Informent then can be programmed to generate necessary reports on a prescheduled date.
Where Ms. Benson sees the greatest potential benefit from Informent, though, is in the bank's marketing efforts.
"It really allows our lending officers to know their customers better," she explained.
Computer applications that in the past could not link to one another can now be queried by bank staffers in a simultaneous manner, in essence tying together these historically disparate systems.
For example, Ms. Benson noted, staffers can use the system to develop a list of customers who have good business histories - but no lines of credit - with the bank and have overdrawn their checking accounts in the past 12 months. Then staffers can go out and try to sell those customers on the benefits of an overdraft line of credit vis-a-vis paying overdraft fees each time they overdraw their checking accounts.
In addition, the bank can use the system to help analyze the effectiveness of past promotional campaigns. It can determine, for example, what percentage of those customers who took out equity lines of credit when the bank was promoting them two years ago have subsequently signed up for other bank services.
"That's just incredible power," said Ms. Benson.
Looking ahead, Cole Taylor will also use the relational data base to pursue individuals or companies that have left the bank.
The idea, Ms. Benson suggested, is to convince customers to return to the fold by highlighting the bank's high-technology prowess and access to detailed customer and market analyses.
"Banks need the right information at the right time to assist customers in achieving their objectives," explained Ms. Griffin of Systems Techniques Inc.
Relational data base systems like Informent, she said, help banks achieve this end.
Ms. Benson concurs.
"We can get cleaner, faster profiles of our customers, both individually and as a group, and determine how best to meet their needs," she said.
"All this information is out there, it always has been out there. We just needed a better way to access it."
With Informent, Ms. Benson added, bank personnel can look to one place to access the information they need, and be assured that information will be provided in a standardized format.
More important, they no longer have to waste time crunching numbers and preparing reports. The hours staffers once spent compiling reports can now be spent analyzing reports generated by Informent and developing marketing and work plans, Ms. Benson said.
This is particularly important to an institution like Cole Taylor Bank, which employs as its marketing literature the tag line "The Relationship Builders."
Currently, all of Cole Taylor's mainframe applications are linked into the system - nine applications in total, including three deposit applications, a customer reference file, general ledger, three loan applications, and the trust system. Applications in queue include credit card, annuities, and safe deposit, Ms. Benson said.
All applications now on-line are housed in the bank, Ms. Benson noted, but plans are in the works to link service bureau applications as well.
According to Fiserv's Mr. Luisi, an important consideration with Informent is that the system is application-independent. Changes in systems easily can be accommodated by the relational data base, he said.
The design of Informent is geared toward distributed processing. That way, he said, users can combine the cost-effectiveness of centralized mainframe application processing with the power, flexibility, and simplicity of PC technology. Client-server technology, Mr. Luisi explained, is integral to the process.
"Getting data down to the PC level allows a person to manipulate that data to their heart's content," he said. "It really does put power into the hands of the user."
Even more important from Ms. Benson's perspective is the ease with which the system can be understood and used by her colleagues.
"We have several people who are not technically oriented whom we've been able to walk through the system," she said.
A typical training session, she said, lasts two days or less.
And that means more staffers and officers will have better access to better decision-making processes.
"It gives them the right information at the right time," observed Ms. Griffin. "Banks have been reactive for a long time."
Now, with its new relational data base system, Cole Taylor Bank, at least, is working on being more proactive.